Here’s something you hear right before workers start getting huge raises.
“We’ve never spent more money in the history of our firm than we are now on recruiting,” said Keith Albritton, chief executive of Allen Investments, an 84-year-old wealth-management company in Lakeland, Fla.
In 2014, the firm hired an industrial psychologist who helped it identify the traits of its top-performing employees, and then developed a test for job candidates to determine how closely they fit the bill.
Hiring a third-party professional to determine the best process for screening candidates that most closely resemble existing successful employees is how we end up with charts like this, from Deutsche Bank’s Torsten Sløk:
Because as an employer, you have a few options for acquiring or retaining talent.
You can pay for services aimed at getting the best people in the door, which Allen Investments seems to have done.
You can pay up to keep the best people in the door by giving raises to existing employees. As of July, average hourly earnings across the economy were up 2.6% against the prior year, the most since the financial crisis.
Median earnings are up a bit more than that.
But as The Journal’s report makes clear, at a certain point you’re simply left looking for workers that do not exist.
The hook of The Journal’s report is that so-called “soft skills” — think of this as the ability to interact with other humans in a way that doesn’t make them go, ‘What’s this guy’s problem?’ — are in short supply.
“I can teach somebody how to slice and dice onions. I can teach somebody how to cook a soup. But it’s hard to teach someone normal manners, or what you consider work ethic,” restaurant owner Cindy Herold told The Journal.
The answer is that when you do find someone who fits the desired profile of an employee with work ethic and common sense is that you pay them more. Wages, in other words, are going up. Soon.
But all of this, I think, goes even beyond the current labour market dynamics we’re seeing play out.
Go to any high school or university today and you’re likely to hear about STEM — Science, Technology, Engineering, and Maths — programs that promote students focusing on fields of study where, we’re told, “real skills” can be acquired.
This is both true and not.
Think about Ms. Herold’s comments that you can teach someone to slice onions and cook soup. This is a commoditized skill that follows its own logic, has its own rules, and can be picked up by someone prepared to learn and be attentive.
And a commoditized skill following its own logic that can be learned by an attentive student sounds a lot like coding.
Which is not to say the emphasis towards STEM fields is necessarily misguided in its aims, but more that it is flawed in what it implicitly de-emphasises.
The social sciences most simply teach students how to think critically and articulate their view on something. Basically, social sciences are long exercises in reading and writing well. Being creative. Thinking independently. This is the academic proxy for developing “common sense.”
And of course, the STEM fields are not completely bereft of creative thinking.
Cornell University maths professor Steven Strogatz told Business Insider earlier this year:
Because they see it as so black and white, they think maths is cold or maths doesn’t leave room for creativity. But of course that’s false because pretty much everything that human beings do leave room for creativity. And maths is no different. An example would be when someone is solving a maths problem; there’s usually lots of different right ways to do it. And some will be more creative or more insightful than others. It’s not true when people say that maths is just right or wrong. You can have many things that are right, but some are more elegant or more creative or more insightful or illuminating than others.
But it’s when we’re unable to see past the either/or nature of emphasising certain areas of study over others, combined with a strong labour market, that we begin to see the cracks form.